Crop Genetics enters deal for marketing seed cane

July 30, 1993|By Patricia Meisol | Patricia Meisol,Staff Writer

Crop Genetics International said yesterday it has granted exclusive marketing rights for its proprietary sugar cane seed cane, Kleentek, to Helena Chemical Co.

In the initial phase, Helena will market CGI's seed in Louisiana in exchange for a share of the profits. In 1996, Helena would have the option to become an equal partner with Crop Genetics in the production and sale of Kleentek in exchange for a substantial capital investment.

Crop Genetics, a biotechnology company based in Columbia, reported $1.4 million in direct sales of Kleentek, its only product on the domestic market, last year. The "plantlets," developed and grown in laboratories, are free of the disease that accompanies traditional seed cane and results in up to 15 percent higher yields, the company said.

With the new agreement, Crop Genetics expects sales to increase 20 percent in 1994 and 25 percent in 1995, said Todd Taylor, director of business development.

"As a small company with a single product, it is difficult to invest in a marketing and sales force. So it makes a lot of sense to hook up somebody who already has that in place," he said.

"We're excited about this because of the size of Helena and the potential," Mr. Taylor said.

Helena, a Memphis, Tenn-based, privately owned national distributor of agricultural products with $1 billion in sales, regularly calls on growers in the sugar cane regions of Louisiana, Texas and Florida and would offer Kleentek as another product. The initial agreement covers only Louisiana, but is expected to grow to include other regions. Crop Genetics' product now is used on 4,000 acres in Louisiana. Between 80,000 and 100,000 acres of new sugar cane are planted in that state annually.

If Helena chooses to exercise the partnership option, the companies could negotiate an arrangement at the end of 1995 whereby Helena would contribute cash and Crop Genetics technology, assets and people, Mr. Taylor said.

Crop Genetics, a research and development firm, has 80 employees in Maryland. The company's strategy is to forge alliances with companies that can market and sell its products.

Crop Genetics was founded to develop biological pest controls for the agricultural industry.

The company's stock closed at $3.62 a share yesterday, unchanged from Wednesday.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.